'Shark Tank' contestants get two judges to team up and push out Kevin O'Leary for a $500,000 deal
Among "Shark Tank" investors, Kevin O'Leary is known to be ruthlessly competitive. But sometimes other sharks outsmart Mr Wonderful to steal the deal from under his nose. This happened when the co-founders of 'Phoozy,' Kevin Conway and Josh Inglis, walked into the show. While O'Leary tried hard to get a royalty for their product, Robert Herjavec and Lori Greiner teamed up to push him out and get a $500,000 deal.
In the episode, Conway and Inglis entered the Tank seeking $500,000 for 10% equity in their business. In their pitch, they explained how expensive it was to replace or repair phones due to damage, especially from overheating. Conway personally hated it when his phone shut down in the heat, and being a NASCAR racer, he was familiar with thermoconductive materials; he decided to solve the issue.
Thus, he teamed up with Inglis, and they came up with "Phoozy," the world’s first thermal and drop-safe solution for mobile devices. They explained that their phone protector is made out of the same materials found in race cars, spacesuits, and space shuttles, and it keeps the phones safe from extreme temperatures and water damage. They then called up Daymond John to test the product in different, cold, hot, and wet environments to show its efficacy.
They further shared that Phoozy also offered military-grade drop protection to prevent scuffing, scratches, and more. As the Sharks checked out the samples, they called it a "no-brainer product." To further impress them, Conway and Inglis shared that the company had $2.2 million in lifetime sales and was expecting to end the current year with $4.5 million in sales.
With everything laid out, the sharks soon started to make moves. Mark Cuban was the first to talk, but he decided to drop out because the product wasn't for him. However, O'Leary was eager to make an offer, but in his unique style. "I think you're overvaluing a little bit," he said before offering a royalty deal of $500,000 for 4% equity, along with a royalty of $1 per unit until he got back $1.5 million.
As the entrepreneurs analyzed the offer, Greiner jumped in, saying she would do the same deal for $1 royalty but would take only $1 million back. Then, Herjavec jumped up to match Greiner's offer as well. The entrepreneurs then asked Greiner if she would team up with Herjavec, and she agreed to do it if they raised the royalty to $1.50.
Sensing competition, O'Leary modified his offer to $500,000 for 2.5% equity, and a $1 royalty until $1 million is recouped. Despite the bold attempt, it didn't work for Mr Wonderful as the entrepreneurs chose to partner with Greiner and Herjavec.
As per the Shark Tank Blog, the deal unfortunately never closed. Despite the setback, Phoozy witnessed massive demand and success after the episode was aired.
More on Market Realist:
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'Shark Tank' contestants showed off a Nikola Tesla-like science experiment and got a $500,000 deal
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